At Heritage, we believe that education is an important part of the estate planning process. On this blog we will be sharing some information, articles, and opinions that you may find helpful along your way.

If the parents do not talk to their children about their wealth and likely inheritances, then the children might not be ready to receive the wealth and be incapable of properly managing it.

Wealthy parents need to work with estate planning attorneys to create a wealth transfer plan that works for their family’s unique circumstances. This gives parents something specific to talk to their children about.

The conversation with the children should occur, when the children are ready to receive the news without it changing their own goals in life.

When that time should be, will differ for every family. Most often, however, it will be when the children have already established their own careers and families.

The conversation does not need to happen all at once. Children can be told incrementally, as they are ready to receive more and more information.

Our attorneys at Heritage Elder Law and Estate Planning can guide you in creating an estate plan that meets your unique circumstances. Contact us today at (724) 841-0004.

05/16/2017

Muammar Gaddafi's son was killed in the Libyan revolution of 2011. He had opened an account in a Malta bank in 2002 that had grown to US$66.9 million at the time of his death.

Now, his mother, Muammar Gaddafi's widow, is attempting to claim the money for herself. She is opposed in that action by the Libyan State Litigation Department, which would like the funds to be returned to the Libyan government. The unique failed state status of Libya is creating problems.

The Libyan government official in charge of presenting documentation to prove the validity of the state litigation department has not done so. This appears to be because the official was appointed by Libya's Tobruk government while the litigation department is under the authority of the Minister of Justice in Tripoli.

Dictators or their families have in the past been accused of stealing money from their countries and stashing it in foreign bank accounts. Under international laws there is a process for successor governments to prove the money was stolen and reclaim it. However, it is not always easy to prove the money was stolen or that the new government is legitimate.

In this case, the government situation in Libya is playing into the widow's hands. She is the nearest relative as a successor to her son. If no one can prove the money was stolen and that it should be given to a legitimate government, then the widow could end up with the money.

01/29/2016

The ever increasing life expectancy is leading to a possible problem of people reaching retirement age and still having elderly parents that require care.

As the human life span continues to get longer, people are sometimes reaching retirement age and finding they have elderly parents who need care. And, sometimes those new retirees are no longer physically capable of providing the care. One possible way to handle this situation was recently written about in the New York Times article "A Twist on Caring for a Parent: Move Into the Home."

The article tells the story of a 71-year-old man who moved into the same continuing care retirement community as his 96-year-old mother. It allows the man to help his mother while still having the facility staff to do what he is not able to do. All chores, such as cooking, cleaning and laundry, are done by the staff.

Obviously, this is an expensive solution to the problem and many families will not be able to afford to have two generations living in the same retirement community. How to take care of an ever aging population is something that elder law experts and legislatures will have to eventually address.

Having elderly children care for their elderly parents is unlikely to work in the long term.

For now, it is best to plan ahead. Through proper retirement and estate planning it is possible to ensure that elderly family members, including yourself, will have proper care.

Contact an estate planning attorney for advice on how to reach that goal. At Heritage, we work with families to plan for their future and help give families a peace of mind that they will be taken care of as they age. For more information on our process and estate planning, attend one of our free workshops.

01/28/2016

It is important to know what to leave in and what to leave out when creating living trusts.

The goal of many estate plans is avoiding probate and a living trust is popular because of its flexibility. But, despite the ease of use and flexibility, people often get tripped up because they are totally unaware of what must be done so the trust works as intended.

Trusts can only be used to avoid probate when assets are transferred to the trust. That means that ownership must be transferred from the individual to the trust.

Some property might be exempt from probate by state laws. Accordingly, it is a good idea to check the laws in your state. For example, if cars are exempt from probate in your state, then there is no need to transfer ownership of them to a trust.

Retirement accounts do not need to be transferred to the trust. By law they will pass to the named beneficiary. Just make sure that the beneficiary designation is up to date.

Get advice on trust creation from your estate planning attorney and accountant to ensure all relevant issues are addressed.

An estate planning attorney could be helpful in working through the process. At Heritage, we have a large support staff devoted to ensuring that trusts are properly set up and funded with the help of clients and attorneys. To learn more about our process, visit our website.

01/27/2016

An estate plan is often used in an attempt to circumvent a divorce degree but sometimes it is not a successful idea.

There are many possible requirements placed in a divorce decree and requiring a life insurance policy probably isn't at the top of the list but that order can be the cause of lingering resentment for the ex-spouse who is ordered to pay it.

For example, what if one spouse is ordered to pay the other spouse periodic payments? This order may not be for ongoing support but as the best way to make an equitable division of property. Sometimes the spouse who is ordered to pay might also be ordered to take out a life insurance policy and designate the other spouse as a beneficiary. That way if the paying spouse passes away before all of the payments are made, then the life insurance can be used to make the non-paying spouse whole.

A problem with this is that people often try to get around these orders. How? By designating someone else the beneficiary of the life insurance policies and not making any offsetting changes to their estate plans.

A reader asked Market Watch a question about her husband's life insurance. It seems that as part of the divorce decree from a previous wife he was ordered to maintain a life insurance policy with his children as beneficiaries until those children reached the age of 23. The policy however listed only the new spouse as a beneficiary.

He had no will and the new spouse wondered if she could keep the insurance money or must she give it to the stepchildren if her husband did pass away.

The answer to the woman's question and other similar questions is simple.

The terms of the divorce can be enforced. The children could ask to have the man held in contempt of court and file a claim against the estate for the amount of the life insurance.

A possible solution? If her husband is insurable, then he should take out a new policy and designate her as the beneficiary.

It might be wise to contact an estate planning attorney for advice before proceeding. If you have questions about the impact of a divorce on your estate plans, call Heritage to learn more.

01/26/2016

An extraordinary effort often has to be made by families with children with special needs to be assured the child is cared for after the parents die. The ABLE Act was passed to ease that problem.

Children with special needs may be covered by monthly Supplemental Security Insurance payments but it generally takes a lot more money than those checks to properly care for the child. This has long created an issue for these parents as they worry about what will happen to their child when the parents pass away.

Parents could not just leave money to the child in their estate plans because that could make the child ineligible to receive SSI. Instead, special needs trusts had to be created by the parents. These were often less than ideal as they could only be created by a parent and required a trustee other than the disabled person to handle the money.

The Achieving a Better Life Experience Act seeks to make things easier.

A person who became disabled prior to the age of 26 can create and maintain the account for him or herself.

Funds in the account are not used to determine SSI eligibility as long as they are less than $100,000.

Account income is not subject to income tax.

Funds must be used for qualified disability expenses.

When the account holder passes away, account assets must be used to pay back the government for benefits received unless they are rolled over into the account of a family member who is also disabled.

An estate planning attorney should be consulted for advice on dealing with potential restrictions on ABLE accounts and the possible use of a special needs trust. For more information on ABLE accounts and Special Needs Trusts, visit our website or contact us.

10/06/2015

People who write their own wills, often in an effort to save money, end up leaving a mess when they pass. In many cases, their wishes are not carried out because the wills do not adhere to tenants of law. If you want your wishes to be followed, the best path is to work with a good estate planning attorney.

Two cousins were very close. They may have lived in different states, but spoke frequently, travelled together often, and even shared a birthday. Jill Widdman and her cousin Gary Kruger thought of each other as soul mates and twin cousins.

Three years before passing away, Kruger made out a handwritten will that left his home and checking account to his cousin. He went to the bank and had the will notarized. What Kruger intended for his assets after he passed away seemed clear. However, his cousin did not receive the home or checking account. Instead, Kruger’s nieces split the assets between themselves.

Kruger’s handwritten will was invalidated because under Minnesota law, a will must be witnessed by two people. The notary counted as one witness. There was not a second witness to Kruger’s will. As he had no living parents, siblings or children by law his estate went to the nieces.

While many states will accept these handwritten wills and forgive some technical flaws in their execution, Minnesota will not do so. This illustrates the danger of not hiring an estate planning attorney to draft your will. An estate planning attorney would have known that the law required two witnesses to the will. A notary public may not know that, which appears to have happened in this case.

By writing his own will Kruger may have saved some money at the time, but it came at the cost of not being able to have his final wishes obeyed. To learn how to avoid these problems and many others, call us to sign up for your free workshop.

08/26/2015

Trusts are widely used by estate planning attorneys, with good reason. Trusts are a good way to pass wealth from one generation to the next, protecting assets from the effects of estate taxes, divorce, creditors and scam artists. But trusts are not the only way to transfer wealth. There are times when a simple outright inheritance will do the job. The key is knowing when a trust is a good idea, and when it is an unnecessary addition to an estate plan.

According to financialplanning.com’s post “Should Estate Plans Rely on Trusts?,” people structure their estate plan to include trusts for a number of reasons. In some instances, the trust functions as a contingent beneficiary, usually when there are minor children involved, and the trust assigns a guardian for the children until they come of age. Assets held in trust are not subject to probate at death, which is useful if a person owns property in multiple states, thereby avoiding probate in each state.

Implementing a trust provides control for assets in the event of incapacity. A co-trustee or successor trustee will take over the management of the trust assets. Another nice thing about a trust is that it gives you maximum privacy, where a will is public record and open to all.

Trust language can be drafted to reduce or eliminate estate taxes, as well as to protect from divorce settlements and creditors. In addition, a trust can protect dependents with special needs. Ask your estate planning attorney about a special needs trust for your child with special needs—or about the other types of trusts that might benefit your circumstances.

An individual can use trusts in one of two ways. Some people will grant title assets to a trust while alive, and then the living trust terms will stipulate the distribution of trust assets at the grantor’s death. Other folks don’t have a standalone living trust; instead, they use a testamentary trust which is funded through a will.

Contact a qualified estate planning attorney to help you decide which way to go. To learn more about trusts and estate planning essentials, attend one of our free workshops.